The US dollar was lower on Friday, after data showing a dip in consumer sentiment, but the greenback was still poised for a ninth straight week of gains, while the yen weakened to a 10-month low.

The University of Michigan's preliminary reading of its Consumer Sentiment Index dropped to 67.7 this month from a final reading of 69.5 in August and below the forecast of 69.1 among economists polled by Reuters. However, consumers saw inflation lower on both a one-year and five-year basis.

Earlier data from the Labor Department showed import prices increased 0.5 percent last month as fuel prices jumped, but underlying price pressures stayed subdued while a separate report from the New York Fed showed factory activity picked up in the state in September.

"None of the data currently points to a recession. Nevertheless, the fed futures still point to the end of next year, a lower rate," said Joseph Trevisani, senior analyst at FXStreet.com.

"If the credit markets are still convinced that when you increase rates as much as the Fed has, you eventually get a recession ... where do people go? They go to the dollar."

The Federal Reserve will hold a policy meeting next week on Sept. 19-20 and the central bank is largely viewed as keeping interest rates unchanged, with a 97 percent expectation for no action, according to CME's FedWatch Tool.

After edging higher earlier in the week, expectations for a 25 basis-point hike at the November meeting have declined to 30.6 percent from 43.6 percent a week ago, with a small chance of a cut being priced in as early as January.

The US dollar index was down 0.08 percent at 105.32, but was still poised for its ninth straight weekly gain, which would mark its longest weekly run since a 12-week streak of gains in 2014.

The greenback continued to strengthen against the yen, after the Japanese currency had a sharp move higher versus the dollar earlier in the week. The dollar was last up 0.25 percent at 147.84 yen after hitting a 10-month high of 147.96.

The euro was up 0.2 percent at $1.0666, having recovered slightly from Thursday's six-month low of $1.0629 following the European Central Bank's (ECB) policy announcement, in which the central bank raised rates to a record-high 4 percent but signaled it was likely done with hikes.

However, ECB policymakers pushed back on the idea the central bank was done with rate hikes, saying rates will be kept high for an extended period and could even be raised again if needed.

The euro was on track for a ninth straight weekly fall against the dollar.

Sterling, declined 0.2 percent at $1.2386. Along with the Fed, the Bank of England will also make a policy announcement next week.